You are here: Home - Investing - Experienced Investor - News -

Expert investor picks four unusual property investments

Written by:
Rathbones’ David Coombs has bought into commercial property for the first time, but using less mainstream options and investment trusts.
Expert investor picks four unusual property investments

The group’s head of multi-asset investments has been on the lookout for property investments for some time, but has been “sceptical” about the attractiveness of the sector, which has seen huge hot money inflows.

“The feeling we got from many property fund managers is they were mostly sellers rather than buyers, and do not want any more money coming into their funds,” Coombs (pictured) said.

“We are looking for a diversifier and not to chase hot returns. If a fund is taking flows and is forced to buy more assets, that is a worry.”

Coombs has chosen more esoteric property investment options, allocating around 1%-1.5% to four investment vehicles to build up exposure in his Multi Asset Total Return portfolio. He intends to raise this to a total of 10% if new investment opportunities arise.

Santander UK IPD tracker

Coombs has invested 1.5% of the portfolio in this structured note tracking the IPD property index, so it provides exposure to the index itself, which cannot be bought otherwise.

“The beauty of this is we do not pay any stamp duty and it gives us exposure to the asset class as modelled by most consultants,” he said. 

Tritax Big Box REIT

Another 0.9% has been allocated to this REIT investing in large distribution centres – Coombs bought the fund at a premium of 2%, but expects it to outperform in the long run. Year to date it is up 5.4%.

“We did not want to be buying high street retail units when far more companies are disengaging with the high street,” Coombs said. “This fund invests in one of the few subsectors where all the new developments are pre-let, so it is in tune with future trends.”

Schroder Real Estate Investment trust

Coombs has allocated the rest of the money to investment trusts, which he prefers to open-ended vehicles.

Schroders’ trust has a 1.4% allocation in the fund; over three year it is up 83%.

UK Commercial Property trust

The remaining 1.5% has been allocated to this trust, managed by Ignis Asset Management before it was taken over by Standard Life Investments. It is up 27% over three years.

Coombs said: “Both trusts had placing, and although we bought them at a slight premium, it is still better than going into an open ended fund as we avoid the cash drag.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week